Wednesday, April 28, 2010

City loan may list Ingalls pavilion

The city of Decatur could jump-start construction of a 25,000-square-foot pavilion at Ingalls Harbor by fronting up to $2.8 million to cover the project’s cost.

The City Council will consider Monday a resolution calling for the city to advance funds for additional facilities at the city-owned harbor on the Tennessee River.

Requested by the local visitors bureau and the Hospitality Association, the improvements are intended to expand use of the facility beyond its primary function as a popular site for fishing tournaments.

Specifics call for construction of a large pavilion capable of seating 750 people at tables and a maximum of 1,500 people without tables.

The proposal also includes additional parking, lighting, irrigation, landscaping and electrical work.

Director of General Services Wally Terry said the project would satisfy the city’s need for a large meeting place.

“We have long needed a space to house more than 300 or 400 people,” he said.

“We’ve had gatherings with some of our companies — Nucor and others — that wanted to have their meetings here and we just didn’t have a space big enough.”

Repayment

According to the resolution, any money fronted by the city would be paid back from revenue generated by the Hospitality Association’s $2-per-night hotel room occupancy fee.

“It’s kind of like they buy a car for us, and we pay the payments,” said Tami Reist, president of the Convention and Visitors Bureau.

It was not clear Tuesday how the city would structure the debt.

During a work session Monday, city officials discussed using funds from a $4.9 million surplus left from previous fiscal years.

“That way they don’t have to go to the bond market, because unfortunately, it costs so much to go to the bond market that it’s not worth it for $2.8 million,” Councilman Gary Hammon said.

However, that proposal is expected to draw opposition from Councilmen Ronny Russell and Billy Jackson, who claim city officials artificially created the surplus by reinterpreting the city’s financial-reserve policy last year.

Also, the proposed resolution leaves the city the option of reimbursing the debt through a future bond issue, but multiple city officials have described that as a precautionary measure.

Terry said Tuesday he was not aware of any immediate plans for a bond issue or a bank loan.

It was also unclear Tuesday how long paying off the debt would take.

Reist said the room-occupancy fee is expected to generate about $400,000 this year, and that about $167,000 of that would go toward paying off existing debt associated with Ingalls Harbor.

She said she is confident that the fund can support both the proposed and existing debt, estimating the combined annual payment would be about $340,000 if the city borrows the money.

Terry said the city has yet to determine a payoff schedule, which would likely be decided later as project progresses.

The resolution is expected to pass the council Monday.

“I think it will, but let me say that’s based on me being supportive and my hope that the other councilmen will be, too,” said Council President Greg Reeves.